Hundreds surround financial firm demanding loan repayment

They wanted to meet CEO Nguyen Quang Hoang, 36, who was questioned by the police for seven hours at the office on the same day.

A preliminary investigation found that GFDI has been borrowing money from people for years and paying earlier lenders in what was a classic Ponzi scheme.

Due to financial difficulties, Hoang instructed his employees to borrow from the public by promising interest rates of up to 5% a month for a period of three, six or nine months.

The company set the minimum loan amount at US$5,000 or VND120 million (US$4,750), and later raised it to VND150 million.

On Nov. 2 it offered a "promotion program" which promised cash rewards of 0.5-1.5% of the loan amount. But by Nov. 5 lenders started to inform each other on social media that Hoang had written a letter saying repayment would be delayed, and that the company had ceased transactions.

They came to the office the next day but could not meet Hoang

People gather at the office of GFDI in Da Nang City, demanding for loan repayment. Photo by VnExpress/Nguyen Dong

Police have found that at the company owed 7,500 customers a total of VND3.7 trillion (US$147 million) by the time of their investigation.

Among the lenders who showed up at the office was Thu, from the central highlands province of Dak Lak, who loaned the company VND1.2 billion for a monthly interest of 2.5%.

She had received VND200 million in interest, but she had no idea what would happen to the remaining 80% of her money.

Hundreds of others in Dak Lak also loaned the company money, she said.

A 60-year-old woman was also seen in the crowd. She loaned the company a total of VND5 billion for years. It was her savings. "I hid from my children that I have been lending the company money. Now I cannot tell them due to fear of being rebuked."

Some of the lenders were also employees of GFDI. One of them was given the task of securing at least VND150 million in loan in the first month, VND450 million in the second, and the figure kept going up.

To meet the targets, she had to use her own money and asked friends and family members to make loans. The police are investigating further.